Metro PCS 2010 Annual Report Download - page 94

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also secured by the capital stock of Wireless as well as substantially all of the present and future assets of Wireless
and each of its direct and indirect present and future wholly-owned subsidiaries (except as prohibited by law and
certain permitted exceptions).
Under the senior secured credit agreement, Wireless will be subject to certain limitations, including limitations on
its ability to incur additional debt, make certain restricted payments, sell assets, make certain investments or
acquisitions, grant liens and pay dividends. Wireless is also subject to certain financial covenants, including
maintaining a maximum senior secured consolidated leverage ratio and, under certain circumstances, maximum
consolidated leverage and minimum fixed charge coverage ratios.
In March 2009, Wireless entered into three separate two-year interest rate protection agreements to manage the
Company’s interest rate risk exposure. These agreements are effective on February 1, 2010 and cover a notional
amount of $1.0 billion and effectively convert this portion of Wireless’ variable rate debt to fixed rate debt at a
weighted average annual rate of 5.246%. The monthly interest settlement periods will begin on February 1, 2010.
These agreements expire on February 1, 2012.
In October 2010, Wireless entered into three separate two-year interest rate protection agreements to manage the
Company’s interest rate risk exposure. These agreements will be effective on February 1, 2012 and will cover a
notional amount of $950.0 million and effectively convert this portion of Wireless’ variable rate debt to fixed rate
debt at a weighted average annual rate of 4.612%. The monthly interest settlement periods will begin on February 1,
2012. These agreements expire on February 1, 2014.
9¼% Senior Notes Due 2014
On November 3, 2006, Wireless consummated the sale of $1.0 billion principal amount of its 9¼% senior notes
due 2014, or initial notes. On June 6, 2007, Wireless consummated the sale of the additional notes. The initial notes
and the additional notes are referred to together as the existing 9¼% senior notes. On January 14, 2009, Wireless
completed the sale of the New 9¼% Senior Notes at a price equal to 89.50% of the principal amount of such new
notes. On January 20, 2009, Wireless consummated the sale of the New 9¼% Senior Notes resulting in net proceeds
of $480.3 million. The existing 9¼% senior notes together with the New 9¼% Senior Notes are referred to herein as
the 9¼% Senior Notes. On September 21, 2010, Wireless completed a cash tender offer to redeem $313.1 million of
outstanding aggregate principal amount of the 9¼% Senior Notes at a price equal to 104.625% for total cash
consideration of $327.5 million. In November 2010, Wireless completed the redemption of the remaining $1.6
billion in outstanding aggregate principal amount of the 9¼% Senior Notes at a price equal to 104.625% for total
cash consideration of $1.7 billion.
7Ǭ% Senior Notes due 2018
On September 21, 2010, Wireless consummated the sale of $1.0 billion of principal amount of 7Ǭ% Senior
Notes. The terms of the 7Ǭ% Senior Notes are governed by the indenture and the first supplemental indenture, dated
September 21, 2010, among Wireless, the guarantors party thereto and the trustee. The net proceeds of the sale of
the 7Ǭ% Senior Notes were $973.9 million after underwriter fees, discounts and other debt issuance costs of $26.1
million. The 7Ǭ% Senior Notes are unsecured obligations and are guaranteed by MetroPCS, MetroPCS, Inc., and
all of Wireless’ direct and indirect wholly-owned subsidiaries. Interest is payable on the 7Ǭ% Senior Notes on
March 1 and September 1 of each year. Wireless may, at its option, redeem some or all of the 7Ǭ% Senior Notes at
any time on or after September 1, 2014 for the redemption prices set forth in the indentures governing the
7Ǭ% Senior Notes. In addition, prior to September 1, 2013, Wireless may, at its option, redeem up to 35% of the
aggregate principal amount of the 7Ǭ% Senior Notes with the net cash proceeds of certain sales of equity securities
or certain contributions to equity of Wireless. Wireless may also, at its option, prior to September 1, 2014, redeem
some or all of the notes at the redemption price set forth in the indentures governing the 7Ǭ% Senior Notes.
6з% Senior Notes due 2020
On November 17, 2010, Wireless consummated the sale of $1.0 billion of principal amount of 6з% Senior
Notes. The terms of the 6з% Senior Notes are governed by the indenture and the second supplemental indenture,
dated November 17, 2010, among Wireless, the guarantor’s party thereto and the trustee. The net proceeds of the
sale of the 6з% Senior Notes were $987.9 million after underwriter fees, discounts and other debt issuance costs of
approximately $12.1 million. The 6з% Senior Notes are unsecured obligations and are guaranteed by MetroPCS,
MetroPCS, Inc., and all of Wireless’ direct and indirect wholly-owned subsidiaries. Interest is payable on the 6з%